On the evening of August 28, China released eight property-related documents covering the entire real estate chain, from land acquisition, financing and construction to sales, mortgages and delivery. Policies that had shaped China’s property market for decades, including the long-standing pre-sale system and the 30-year cap on mortgage terms, were rewritten in a single evening, signalling a systematic overhaul of the rules governing the sector.
For more than three decades, China’s property market has revolved around the pre-sale model and a growth formula characterised by high debt, high leverage and rapid turnover. But as the sector entered a prolonged downturn, slower sales and cash collection exposed a series of problems, including the misuse of pre-sale funds, stalled construction and delayed delivery.
Breaking away from the old model requires urgent reforms to the commercial housing sales system, tighter supervision of pre-sale funds, and measures to encourage developers to set the scale of their operations in line with their financial strength while strengthening risk awareness. A series of new policies have been rolled out against this backdrop, seeking to sketch out a new model for high-quality development of the property sector.
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